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Targa Resources Corp. TRGP reported fourth-quarter 2025 adjusted earnings of $2.51 per share, which beat the Zacks Consensus Estimate of $2.39. The bottom line also increased from the year-ago quarter’s level of $1.44. The outperformance can be attributed to the increased operating margin in the company’s Gathering and Processing segment and Logistics and Transportation segment, and a decrease in the company’s product costs.
Total quarterly revenues of $4 billion decreased from the prior-year quarter’s level of $4.4 billion. The top line also missed the Zacks Consensus Estimate of $5.2 billion. The weak quarterly revenues can be attributed to lower sales of commodities.
Targa Resources, Inc. price-consensus-eps-surprise-chart | Targa Resources, Inc. Quote
The company’s adjusted EBITDA for the fourth quarter totaled $1.3 billion, up from $1.1 billion in the prior-year period.
On Jan. 15, 2026, Targa Resources declared a quarterly cash dividend of $1 per common share, or $4 on an annualized basis, for the fourth quarter of 2025. Total cash dividends of approximately $215 million were paid on Feb. 13, 2026, to its shareholders of record as of the close of business on Jan. 30.
During the fourth quarter of 2025, Targa Resources repurchased 226,987 shares of its common stock, spending approximately $37 million (at an average price of $163.01 per share). As of Dec. 31, 2025, the company had $1,374 million remaining in its share repurchase program.
Targa Resources also provided an update on its several ongoing projects. In October 2025, it completed construction of its Bull Moose II plant in the Permian Delaware. The company followed this with two small bolt-on acquisitions in the Permian Basin in December 2025. In January 2026, Targa Resources completed its previously announced acquisition of Stakeholder Midstream, LLC.
Expanding its growth portfolio, Targa Resources also announced a new processing plant in the Permian Delaware, named Yeti II, along with orders for long-lead equipment for two additional Permian processing plants. Additionally, the company unveiled plans for a new fractionator, Train 13, in Mont Belvieu, TX.
Gathering and Processing: The segment recorded an operating margin of $611.8 million, up 2% from $598.9 million recorded in the year-ago period. The figure, however, missed the Zacks Consensus Estimate of $652 million.
The year-over-year improvement reflects higher natural gas inlet volumes and higher fee-based margins in the Permian. The increase in natural gas inlet volumes in the Permian was attributable to the addition of the Bull Moose plant during the first quarter of 2025, the Pembrook II plant during the third quarter of 2025, the Bull Moose II plant during the fourth quarter of 2025, and continued strong producer activity.
Logistics and Transportation: This unit reflects TRGP’s downstream operations. Its operating margin of $799 million increased 22% year over year and also beat the Zacks Consensus Estimate of $710 million.
The year-over-year rise can be attributed to higher pipeline transportation and fractionation margin and higher marketing margin. Pipeline transportation and fractionation volumes benefited from higher supply volumes, primarily from Permian Gathering and Processing systems and a full quarter of Train 10, which commenced operations during the fourth quarter of 2024.
TRGP’s fractionation volumes totaled 1,144.4 thousand barrels per day, up 5% from 1,089.5 thousand barrels per day recorded a year ago. The Zacks Consensus Estimate for the same was pegged at 1,136 thousand barrels per day. NGL pipeline transportation volumes rose 20% year over year, export volumes decreased 4% and NGL sales increased 3% in the same period.
Targa Resources incurred product costs of $2.3 billion, which decreased 21% from the year-ago quarter’s figure. At the same time, it reported operating expenses of $337.6 million, up 10% from the year-ago quarter’s level of $305.8 million.
The company spent $1 billion on growth capital programs compared with $819.7 million in the year-ago period.
As of Dec. 31, 2025, TRGP had cash and cash equivalents of $166.1 million and long-term debt of $16.7 billion, with a debt-to-capitalization of around 83.9%.
For 2026, Targa Resources projects its full-year adjusted EBITDA of $5.4-$5.6 billion. The company anticipates significant growth across its Permian G&P footprint, which is expected to drive record Permian, NGL pipeline transportation, fractionation and LPG export volumes in 2026, surpassing the records set in 2025. The growth is expected in the second half of 2025. Targa Resources’ 2026 operational and financial outlook is based on assumptions that Waha natural gas prices will average $1.00 per MMBtu, NGL composite prices will average $0.60 per gallon, and crude oil prices will average $63.00 per barrel.
Targa Resources’ estimated net growth capital expenditures for 2026 are expected to be around $4.5 billion, which includes capital spending for the announced infrastructure projects, including six new Permian plants, three fractionators in Mont Belvieu, the Speedway NGL Pipeline, GPMT LPG Export Expansion, intra-basin residue gas projects in the Permian and spending on long-lead items for two additional processing plants in the Permian. Net maintenance capital expenditures are estimated to be at $250 million.
For the first quarter of 2026, Targa Resources plans to propose to its board of directors an increase in its common dividend to $1.25 per share, equivalent to $5.00 per share on an annualized basis. If approved, the higher dividend would take effect for the first quarter of 2026 and be paid in May.
TRGP currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
While we have discussed TRGP’s fourth-quarter results in detail, let us take a look at three other key reports in this space.
TechnipFMC plc FTI reported fourth-quarter 2025 adjusted earnings of 70 cents per share, which beat the Zacks Consensus Estimate of 51 cents. The bottom line also increased from the year-ago quarter’s reported profit of 54 cents. The outperformance is primarily driven by strong results in both the Subsea and the Surface Technologies segments.
Newcastle & Houston-based oil and gas equipment and services provider’s revenues of $2.5 billion missed the Zacks Consensus Estimate by 25 million. However, the top line increased from the year-ago quarter’s reported figure of $2.4 billion.
As of Dec. 31, 2025, FTI had cash and cash equivalents worth $1 billion and long-term debt of $395.7 million, with a debt-to-capitalization of 10.5%.
Oceaneering International, Inc. OII reported an adjusted profit of 45 cents per share for the fourth quarter of 2025, beating the Zacks Consensus Estimate of 44 cents. Moreover, the bottom line surpassed the year-ago quarter’s reported figure of 37 cents. This was driven by strong year-over-year operating income from its Subsea Robotics, Manufactured Products and Aerospace and Defense Technologies segments.
Total revenues were $668.6 million, which missed the Zacks Consensus Estimate of $711 million and decreased approximately 6.3% from the year-ago quarter’s $713.5 million due to lower revenues in the company’s energy-focused businesses. The revenue decrease in the energy business was primarily due to the unusually high number of international intervention and installation projects that OII’s Offshore Projects Group segment performed in the prior-year quarter, but that did not repeat in the fourth quarter of 2025. In the fourth quarter of 2025, the Houston, TX-based oil and gas equipment and services company reported adjusted EBITDA of $90.5 million, a 10.9% decrease year over year.
As of Dec. 31, 2025, OII had cash and cash equivalents worth $688.9 million and $497.5 million, respectively, along with a long-term debt of about $487.4 million. The debt-to-capitalization was 31.2%.
Expand Energy Corporation EXE reported fourth-quarter 2025 adjusted earnings per share of $2, beating the Zacks Consensus Estimate of $1.89. Moreover, the company’s bottom line increased from the year-ago adjusted profit of 55 cents, fueled by strong production and higher natural gas price realization.
Expand Energy’s ‘natural gas, oil and NGL’ revenues of $2.3 billion surpassed the Zacks Consensus Estimate of $2.2 billion. The top line was also higher than the year-ago figure of $1.6 billion.
As of Dec. 31, 2025, EXE had $616 million in cash and cash equivalents. Expand Energy had a long-term debt of $5 billion, reflecting a debt-to-capitalization of 21.2%.
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This article originally published on Zacks Investment Research (zacks.com).
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